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Bank regulation, supervision and lending: empirical evidence from selected sub-Saharan African countries

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  • Thamae, Retselisitsoe I
  • Odhiambo, Nicholas M

Abstract

This study investigates the impact of bank regulation and supervision on bank credit in 23 sub-Saharan African (SSA) countries and their low- and middle-income groups from 1995 to 2017. The long-run results indicated that stringent entry barriers and supervisory power reduced bank lending, but supervisory power mitigated the negative effect of entry barriers. Furthermore, positive shocks to entry barriers impacted negatively on bank credit, while negative shocks to capital requirements had an adverse impact on lending. In the short run, positive shocks to entry barriers, activity restrictions and capital regulations led to increases in bank credit, particularly in low-income SSA economies.

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  • Thamae, Retselisitsoe I & Odhiambo, Nicholas M, 2022. "Bank regulation, supervision and lending: empirical evidence from selected sub-Saharan African countries," Working Papers 29839, University of South Africa, Department of Economics.
    • Handle: RePEc:uza:wpaper:29839
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    1. Tiago F. A. Matos & João C. A. Teixeira & Tiago M. Dutra, 2023. "The contribution of macroprudential policies to banks' resilience: Lessons from the systemic crises and the COVID‐19 pandemic shock," International Review of Finance, International Review of Finance Ltd., vol. 23(4), pages 794-830, December.

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    Keywords

    bank regulation; bank lending; common correlated effects; linear and nonlinear panel ARDL; sub-Saharan Africa;
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